NATO's activities and impacts, which began after World War II to oppose the Soviet Union's expansionism, exemplify the nature of global public goods, a key concept in public finance. This study explores NATO's evolving role in collective defense and security through the lens of global public goods theory. The alliance provides benefits such as deterrence, security, stability, and protection of international trade routes, which qualify as pure global public goods, along with global club goods like advanced technology, intelligence sharing, and joint exercises. This dual structure offers new insights into issues like burden-sharing, free-riding, and under-provisioning, challenges that have persisted since the alliance's founding. The study also reviews the development of the quasi-fiscal rule on defense spending commitments, adopted at the 2014 Wales Summit, and its impact on collective action problems. Additionally, NATO's cooperation with other international organizations and regional actors demonstrates that its positive externalities extend beyond the Euro-Atlantic region. The study discusses concerns such as unequal burden sharing, technological fragmentation, and potential negative effects on other public expenditures. Overall, NATO illustrates a rare and transparent approach to financing and governing global public goods in defense and security. However, it requires a more flexible financial framework and outcome-based regulations to ensure its continued effectiveness.